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Souq.com acquires courier wing.ae to expand delivery service

The Amazon subsidiary has already made an initial investment in the UAE-based courier and merchants' platform

Ronaldo Mouchawar, the chief executive of Amazon subsidary souq.com. Mergers and acquisitions in the sector have also picked up pace over the past year after Amazon acquired Souq.com for $650m in 2017. Ahmed Jadallah/Reuters

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Souq.com, the e-retailer that has been acquired by Amazon.com for US$650 million this year, said on Wednesday it plans to purchase Wing.ae, a marketplace for merchants and couriers in the UAE, as it expands delivery services.

Souq.com has previously invested in wing.ae, the firm said in a statement without specifying the value of the deal or the amount it has previously invested in platform.

“At Souq.com, our customers will remain our key focus and we will continue to deliver an exceptional online shopping experience,” said Ronaldo Mouchawar, the chief executive of Souq.com. “Fast dependable delivery is key to this, and Wing.ae provides Souq.com customers with more convenience for their same and next-day delivery. With Amazon’s support, we are putting all our efforts in providing an ever-improving shopping experience for customers in the Middle East.”

Compared to other markets, e-commerce in the UAE has been relatively small in scale , however recent acquisitions and investments in the sector are gathering traction and expected to create an online retailing boom.

Mohamed Alabbar, the billionaire entrepreneur and the chairman of UAE’s largest-listed real estate developer Emaar Properties, is in the process of launching $1 billion noon.com this year. The joint venture with Saudi Arabia’s sovereign wealth fund, Public Investment Fund, will offer 20 million items for sale through the online platform, whose launch has already suffered delays.

Amazon in the meantime has begun selling products to UAE consumers through Souq.com, as the world's largest retailer makes a move to grab a larger share of the Middle East's online shopping market. The retailing company has started small, selling only a handful of Amazon-branded products in August, but it is a major step for shoppers who largely rely on the mall and hypermarkets for their shopping needs.

Consultants AT Kearney expect e-commerce in the UAE to grow at a compound annual growth rate of 25 per cent per year up to 2020, while Frost and Sullivan estimate that the market could be worth up to $10bn by next year.